How to buy a house when sellers are in charge
BetterBond - South Africa
When there’s a shortage of well-priced housing stock as there is in SA now, buyers have to learn to deal with more competition for those homes.
“For several years after the 2009 recession, there were more homes for sale than buyers,” says Shaun Rademeyer, CEO of BetterBond Home Loans, SA’s biggest mortgage origination group, “and buyers got used to being able to pick and choose between several options and being able to take their time over purchasing decisions.
“But historically low interest rates and steadily rising demand have absorbed just about all the excess stock and, with developers having been so cautious about bringing new projects to market for the past few years, a clear shortage of homes for sale has now arisen in many popular areas. And the result is that an increasing number of buyers are finding themselves in the unfamiliar position of having to compete with other prospective buyers for the properties they want.”
However, he says, a home purchase is still a complex transaction, and they should take care not to make mistakes in the heat of the moment that could cause them many years of financial regrets. “The most common mistakes that buyers in a competitive market make, is to go into that market without enough cash.
How to buy a home
July 2014 House Price Indices
Absa - South Africa
Resilient house price growth amidst challenging economic conditions
The residential property market will continue to be driven by macro-economic trends and factors related to household finances, such as employment, income, savings, property running costs and inflation in general, interest rates, credit-risk profiles, banks’ risk appetite and lending criteria and consumer confidence. These factors are to impact the property market and mortgage advances, which will be evident in demand and supply, prices, market activity, buying patterns, transaction volumes and growth in mortgage finance. Based on trends in and prospects for the economy and household finances, as well as house price growth in the first seven months of the year, single-digit nominal price growth is expected in the remainder of 2014 and in 2015. Real house price growth will be the result of the combined effect of nominal price trends and inflation, with relatively low real price inflation projected for this year and 2015.
Absa House Price Indices Jul 2014
New state plan for social housing
IolProperty - South Africa
Human Settlements Minister Lindiwe Sisulu is hoping to convince the Treasury to agree to the introduction of incentives to encourage the private sector to get involved in the provision of social housing. Sisulu also wants every private sector entity, as part of their social responsibility obligations, to put something into housing.
In an exclusive interview with Business Report yesterday, Sisulu said that the private sector had made it very clear there had to be something 'in it for us' for them to come on board and recommit to another social compact on the provision of social housing. 'We have to make it attractive for them to come on board. I have an appointment to see the [finance] minister. Incentives exist in various other forms for the private sector for various reasons. I think this one is very necessary.
How you can tell if you are buying into, or selling in a sellers' market
Rawson - South Africa
South African home buyers and property trend watchers in the bigger centres are now regularly told that property market conditions have improved sufficiently to justify the belief that they are now in a seller’s market. How does a potential home seller (or for that matter a buyer) decide if this is in fact true of the area in which he lives or hopes to live?
An initial, very obvious question to ask, said Tony Clarke, Managing Director of the Rawson Property Group is, “Are there any repossessed homes still awaiting sale in the area?” If there are several such forced sales on the go, he said, it is a sure sign that the area has still not fully recovered from the downturn and cannot be described as a seller’s market. At the moment there are relatively few such areas in South Africa but the question regarding them is nevertheless worth asking.
“Bear in mind,” he said, “that repossessed homes usually sell below their true market value and therefore not only spoil the area’s image but will in all probability also lower the average price of homes in their vicinity.”